InformationWeek

Whatever lesson the call was meant to convey, one thing was clear to Pechenik: It was time to start his own business.

"I realized the company wasn't about letting people learn on the job, about letting them make mistakes," Pechenik says. With an idea for a unique business application, he left his software-industry employer to start TechTrader Inc., a Washington, D.C., software company that's trying to carve a niche in the competitive business of trading platforms.

What drove Pechenik to launch his own company suggests something about the broader economy: The end of the stock-option gold rush won't stop innovative IT entrepreneurs with a quest for independence. The market for initial public stock offerings is cooling-29 companies postponed IPOs in May, compared with five that did so in March, according to IPO.com. But the demise of a get-rich-quick market for startups will only kill off the get-rich-quick entrepreneurs, while the real business of starting companies based on innovation will continue.

"Entrepreneurs are in it to prove a point," says Wendell Dunn, professor of entrepreneurship at the University of Virginia's Darden Business School. "They have a view of the world or a market or a technology that they feel is superior to what is around them."

Dunn says that while money plays an important role for some, entrepreneurship is fundamentally about innovation-in business or any other realm-and about individuals trying to put their innovation to work. What follows are the stories of four small companies, all privately owned and launched by IT professionals, that show that not all startups live or die with the fortunes of the stock markets.

Pechenik was 26 when he left his former employer, a large company he declines to name, to start TechTrader in September 1998. His goal was fairly simple: to build a product-software to run a trading platform for goods and services-and recruit his buddy and fellow MIT graduate, Greg Campbell, to help him.

"When I started the company, I never even thought about venture capital," Pechenik says. "I was intent on building a trading platform with a good friend."

In a couple months, they realized they needed to move faster than their four hands could write code. About the same time, Pechenik attended an event in Washington called the Grubstake Breakfast, at which entrepreneurs pitch their ideas to potential investors. He sat next to an angel investor who later introduced him to the venture-capital firm Mid-Atlantic Venture Fund.

Pechenik's company is in a crowded market, filled with lots of rivals promising advanced marketplace technology. Competitors include well-financed companies with blue-chip partners, such as Commerce One Inc. and Ariba Inc. But Pechenik says TechTrader software is built for the trading of more complicated things that can't be tracked by a catalog number, such as services and long-term contracts. It has created an online marketplace, PackagingInsider.com, that serves the packaging industry in partnership with trade publisher Independent Publishing Co.

Strong competitors and a fast-changing market mean TechTrader's success is far from guaranteed, and in that environment Pechenik has come to understand his old boss a bit better. He is driven to push the company toward his vision, yet wants to keep a creative environment that rewards the ambition of each of the company's 38 employees. And he remembers the call that pushed him over the edge.

"I think about that all the time. I finally realized the position the boss is put in," he says. "It's hard to keep everyone happy when you're in such a competitive environment."

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